75: On the Impact of Electric Vehicles Regarding the Economy and the Environment

Thomas M. Menino Convention & Exhibition Center 

Growing questions about the role of gasoline-powered cars have intensified debate over the adoption of electric vehicles (EVs). Using merged state-level data on vehicle fuel types, economic indicators, and environmental outcomes from 2016 to 2023, we analyze the impact of EV adoption on gross domestic product (GDP) and carbon dioxide (CO2) emissions. While prior research finds a linear positive relationship between EV adoption and GDP, our analysis reveals a U-shaped effect. At low adoption levels, increasing EV adoption is associated with GDP declines, whereas at higher adoption levels, increases lead to GDP growth that offset initial losses. Unlike national-level studies, we showcase variation across U.S. states driven by differences in population and political alignment, with more populous states experiencing stronger positive economic effects. Environmentally, EV adoption is linked to lower CO2 emissions, although preliminary nonlinear results suggest that emissions may increase at very high adoption levels. This research highlights the trade-offs regarding increased EV adoption, underscoring the need to consider economic and environmental outcomes concurrently in policymaking.

electric vehicles

economy

environment

transportation

population

U.S. states 

Transportation Statistics Interest Group